European Commissioner calls for debate on format shifting

July 2008

All areas

Most consumers are under the misapprehension that they can make a private copy of a CD and put that onto a cassette, hard drive of their computer or other format – or make a back up copy of computer software – and this is perfectly legal. Well under UK law it most certainly is not – which is perhaps why The Gowers’ Report into IP law in the UK called for this area of copyright law to be revisited and indeed called for the legalising of private copying without compensation for copyright owners. The European Union Copyright Directive allows an exception for consumer private copying on condition that the right holder receives ‘fair compensation’ and many European countries achieve this by way of a levy on either blank discs or tapes or on copying technology. In all events supporters of the format shifting exception say that as there’s no harm to rights holders from the format shift, any compensation should be “zero”. But that is not currently accepted by some parts of the music, software and computer games industries. The Music Business Group, the umbrella group of trade bodies representing music managers, songwriters, publishers and performers responded to Gowers by saying that “enormous value is derived from the transferability of music … last year alone, over 20 million MP3-capable portable devices were sold in the UK, and over 90% of music on the average MP3 player is music that has been copied” adding that “UK creators and right holders are legally entitled to benefit from this value. At present, this value is enjoyed by both consumers and technology companies while creators and right holders are effectively excluded from any value. This constitutes market failure”. Now Charlie McCreevy, Europe’s Internal Market Commissioner, has called on the music industry and the electronics industry to meet and hammer out once and for all the issues around private copying. In many countries a levy has been traditionally charged on the sale of CDRs and blank cassettes which is passed back to the music community as compensation for private copies that music fans may or may not make. However, as sales of CDRs and cassettes fall as more and more people make second copies by ripping CDs to their PC or portable music player, proposals have been made to attach the levy to the sale of said music players – something some have dubbed the ‘iPod tax’. In the UK there has never been a levy system because private copying is, technically speaking, illegal. That said, under the current review of UK copyright law private copying may be allowed though the music industry is lobbying for a levy system to be introduced. Well, a slightly complicated private copying licensing system, which is a variation on the levy theme. But moves to introduce an iPod tax has proved controversial wherever it has been seriously considered, and the manufacturers of the portable music players – Apple in particular – are sure to kick up a fuss. It is with that in mind that McCreevy has called for a pan-European forum where music and electronics firms can discuss the various proposals, what levies should or shouldn’t be charged, and at how money generated by the levy (or licence) system can be best or better distributed. McCreevy’s call for a forum follows a consultation on the issue which finished on 18 Apr and which, according to Music Week, received submissions from 130 organisations.

From the CMU Daily

And comment from Laurence Kaye’s What’s hot in digital media

See the recent research for British Music Rights on illegal copying below (Virgin Media story)

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